AI and Finances: A Winning Combination


According to history, it was a salesman by the name of Loren Dunton who introduced the world to the concept of a personal financial planner in the 1960s. Dunton was inspired by the realization that people in the US had become dependent on Social Security because they lacked personalized financial guidance.

Dunton’s epiphany led to the creation of the personal financial planning industry, but although his work helped plenty of people, it didn’t help everyone. The process involved with developing a personalized financial plan was costly and cumbersome, which meant it was typically only the wealthy who could take advantage of it.

Fintech opens the door to financial planning for the masses

As the 1990s came to a close, the emerging financial technology sector gave birth to a new era of financial planning. The tools it provided made financial planning more accessible, allowing a greater number of people across the economic strata to understand their finances, pay off debt, increase savings, and start investing.

Unfortunately, the solutions provided by fintech had a major flaw — they lacked intelligence, context, and personalization. They were a one-size-fits-all option that could not deliver the value provided by a human advisor.

Today, however, fintech-driven financial planning is poised to take a major step forward by leveraging the power of artificial intelligence. AI introduces the capability to provide automated planning that is also hyper-personalized.

AI empowers a new generation of financial planning

The latest developments in generative AI allow fintech companies to take financial planning to the next level. Generative AI tools like ChatGPT and Google Bard allow context to be considered while developing solutions and are already being leveraged in ways that represent a monumental leap forward in financial awareness and planning.

Consider just a few use cases for AI-driven financial planning tools:

  • For a single parent struggling to make ends meet, AI can identify specific and actionable ways to reduce everyday spending, find more savings, and effectively stretch available resources.
  • For a couple that is newly engaged and intimidated by the thought of planning a wedding, AI can put together a custom-tailored and research-backed financial plan that is based on the couple’s income, assets, liabilities, and goals.
  • For those beginning their investment journey, AI can assist in developing a portfolio that balances risk tolerance, appetites, and appropriate macro-conditions that could affect performance.

The force behind effective AI

With any AI application, good results rely on good data. That means that in order to provide truly personalized financial advice, AI-driven tools will need personalized information.

Currently, you could ask ChatGPT how much it would cost you to take your spouse and two kids on a one-week trip to Disney World and how to save for it. Although it would provide you with an answer, it would only apply to the first part of the question; it could not effectively tell you how to save without a clear picture of your specific financial situation.

By providing an AI-driven financial advisor access to your personal financial data — the type of access that over 200 million people in the US have already provided to other fintech services — you would equip it with the context it could use to give you a complete answer. Armed with detailed information on income, savings, debt, and spending patterns, it could guide you on vacation planning as well as paying off debts, preparing for retirement, shopping for insurance, and a variety of other financial planning needs.

AI and finances are clearly a winning combination with the potential to revolutionize personal financial planning and wealth management. The AI-driven tools that are now starting to appear allow users to maximize the value of personalized financial planning while reducing the cost and complexity that it has traditionally involved.


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